Henri Kox, Luxembourg's Minister of Housing; Credit: SIP / Julien Warnand

Luxembourg's Ministry of Housing has adopted a new financial instrument as part of an investment policy in public, affordable and sustainable housing.

The Elmen project, a new fund to support housing development, will be carried out by the SNHBM in the municipality of Kehlen.

To avoid the risk of precariousness due to the consequences of the current health crisis, the government has put in place a series of measures concerning housing and targeting particularly low-income households, such as rent subsidy increases, a temporary freeze on rents for residential leases, a temporary moratorium on evictions and the extension of deadlines for tenants to public promoters.

Since its entry into force on 1 April 2020, the special support fund for housing development has had a new, more efficient and predictable financing and planning tool. The new fund makes it possible to alleviate the constraints arising from the principle of the annuality of the budgetary law and to better take into account the specificities of construction projects carried out over several years.

This financial instrument also provides greater transparency vis-à-vis the Chamber of Deputies, since the Minister of Housing will submit an annual report to the latter on the operation and expenditure of the special fund, as well as a multiannual programme on planning and carrying out major housing construction projects. The fund is also responsible for the acquisition of land for the creation of housing and the remediation of brownfield sites converted to housing projects.

Together with the acquisition committee of the Ministry of Finance, the Ministry of Housing is implementing a land strategy intended to ensure that public developers have sufficient land potential for the construction of affordable housing. The ministry has thus called on landowners to sell their land to the public. If the property is attractive for the construction of affordable housing, they will be able to benefit from considerable tax advantages and help create affordable housing for future generations.

The innovative “Elmen” project, carried out by SNHBM on the territory of the municipality of Kehlen, is a pilot project headed in this direction and which has made it possible to make enriching and useful experiences for future projects. The "Elmen" project has a size equivalent to that of a real village. Ultimately, around 800 housing units for 2,200 people will be created. According to the latest SNHBM planning, the "Elmen" project will take at least fifteen years before being finalised. As with most larger housing projects, the SNHBM has planned construction in several phases.

A series of sustainability measures are put in place to preserve and promote the site's biodiversity. Green spaces, plantations, soil management and water management are key points of this large-scale project. Indeed, renewable energies are used with partial self-production of energy, this in order to avoid any dependence on fossil energy. 

In the near future, other subsidized housing projects will also be subject to their own financing law, such as "Wunne mat der Wooltz" in Wiltz and "Neischmelz" in Dudelange.

The State will ensure responsible and sustainable management of land and financial resources. Regarding environmental sustainability, the energy aspect and the impact on the climate, the PNEC (National Integrated Plan for Energy and Climate) summarises the policies and measures enabling the achievement of ambitious national objectives. Thus, in terms of housing, the PNEC provides for innovative forms of housing (intergenerational, cooperative and group housing) and planning towards "zero carbon", "zero waste", car-free neighbourhoods and promoting social cohesion.

A first financing bill for this major project is scheduled in the Chamber of Deputies. This new bill concerns the financing of the first of three specific development plans. As the budget exceeds the limit of €40 million, a law of own financing is necessary. The budget of €76 million (28% of the total) covers state participation in the construction of the first housing plans for the "Elmen" project, the total cost being estimated at €268 million.